Family Ownership, ESG Strategies, and Corporate Risk: Evidence from Earning Volatility

In this article, we analyze the combined impact of sustainability activities and family governance on firm-level risk, measured by earning volatility, with particular attention to the timing of ESG involvement. Using panel regression models, we distinguish between short- and long-term ESG performance and between family ownership and family management. The empirical analysis reveals a negative correlation between long-term ESG performance and corporate risk, but short-term ESG impact is insignificant. Family ownership and having a family CEO both decrease firm risk; however, family ownership moderates the link between ESG risks and firm risk.